Correlation Between Goldman Sachs and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and ConocoPhillips at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Goldman Sachs and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Goldman Sachs and ConocoPhillips, you can compare the effects of market volatilities on Goldman Sachs and ConocoPhillips and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Goldman Sachs with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and ConocoPhillips.
Diversification Opportunities for Goldman Sachs and ConocoPhillips
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and ConocoPhillips is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and Goldman Sachs is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Goldman Sachs are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and ConocoPhillips go up and down completely randomly.
Pair Corralation between Goldman Sachs and ConocoPhillips
Assuming the 90 days trading horizon The Goldman Sachs is expected to generate 1.28 times more return on investment than ConocoPhillips. However, Goldman Sachs is 1.28 times more volatile than ConocoPhillips. It trades about 0.3 of its potential returns per unit of risk. ConocoPhillips is currently generating about 0.19 per unit of risk. If you would invest 9,916 in The Goldman Sachs on August 29, 2024 and sell it today you would earn a total of 2,084 from holding The Goldman Sachs or generate 21.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Goldman Sachs vs. ConocoPhillips
Performance |
| Timeline |
| Goldman Sachs |
| ConocoPhillips |
Goldman Sachs and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and ConocoPhillips
The main advantage of trading using opposite Goldman Sachs and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, ConocoPhillips can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.| Goldman Sachs vs. Take Two Interactive Software | Goldman Sachs vs. Raytheon Technologies | Goldman Sachs vs. Bemobi Mobile Tech | Goldman Sachs vs. Charter Communications |
| ConocoPhillips vs. Deutsche Bank Aktiengesellschaft | ConocoPhillips vs. MAHLE Metal Leve | ConocoPhillips vs. SVB Financial Group | ConocoPhillips vs. Iron Mountain Incorporated |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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